Analytics and the Review Process

Reviewing your mobility program requires more than an overview of numbers. It needs to include a deeper dive into why those numbers may be changing. In addition to helping you determine if exceptions are getting out of control, or one cost center is being more generous that others, sometimes, a statistical change can be misinterpreted if not looked at from every angle.

Recently, a client reached out, concerned that, although initiations had not increased, the year to date expense had taken a notable spike. On the surface, their conclusion was correct. While expenses increased over 16% over the same period last year, overall initiations were actually down almost 7 percent.

The first thing I did was break out the expenses by category. Immediately, I could see the culprit. While other category expenses stayed in line with the previous year, the homesale expenses increased significantly, mirroring the year over year expense variance. Additionally, while there was a small increase in average sale price, this uptick in homesale expenses was more due to the number of sales completed during the two periods.

This is where I found the good news. Looking at the average days on market for each home that sold over the past two years, I was able to see a positive trend. Homes are selling faster. In the past 12 months, homes sold in an average of 32 days on the market, verses 59 days in the previous year.

Additionally, I found the average program cost went down almost 30 percent over the same period! Logically, this makes sense, if you think about it. The biggest drag on a relocation program is the homesale piece. In addition to typically being the biggest ticket item, it also impacts other benefits when the market is soft. When transferees cannot sell their home, you find they need to use more temporary living, home trips, loss on sale benefits and exceptions.

So, in the example above, what appeared to be a negative program development, is in actuality a sign of an improving economy and an indication of future savings.

Should this positive trend continue, employers should look at those benefits used to entice potential candidates in a slower, uncertain market and grant them by exception, or remove them outright. By removing these benefits (which no longer make the difference between accepting or refusing the move), employers can cut costs further.

When you look at your historic program data, do you have a clear understanding on the cause of trends?